Revenue

3 Months Ended

Sep. 26, 2020

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

The company recognizes revenues when its performance obligations are satisfied in an amount that reflects the consideration Sysco expects to be entitled to receive in exchange for those goods and services. After completion of Sysco’s performance obligations, the company has an unconditional right to consideration as outlined in its contracts with customers. Sysco’s customer receivables will generally be collected in less than 30 days in accordance with the underlying payment terms. Customer receivables, which are included in accounts receivable, less allowances in the consolidated balance sheet, were $2.9 billion and $2.7 billion as of September 26, 2020 and June 27, 2020, respectively.

Sysco has certain customer contracts in which upfront monies are paid to its customers. These payments have become industry practice and are not related to financing of the customer’s business. They are not associated with any distinct good or service to be received from the customer and, therefore, are treated as a reduction of transaction prices. All upfront payments are capitalized in other assets and amortized over the life of the contract or the expected life of the relationship with the customer. As of September 26, 2020, Sysco’s contract assets were not significant. Sysco has no significant commissions paid that are directly attributable to obtaining a particular contract.

The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:

	13-Week Period Ended Sep. 26, 2020
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	1,491,000	$	314,172	$	428,919	$	—	$	2,234,091
Canned and dry products	1,391,218		391,578		29,573		—		1,812,369
Frozen fruits, vegetables, bakery and other	1,048,833		426,565		256,787		—		1,732,185
Poultry	830,775		179,026		216,635		—		1,226,436
Dairy products	819,493		232,956		147,029		—		1,199,478
Fresh produce	767,097		170,538		64,982		—		1,002,617
Paper and disposables	677,321		90,709		179,174		11,638		958,842
Seafood	481,717		88,567		25,096		—		595,380
Beverage products	179,652		77,466		148,591		11,210		416,919
Other (1)	234,427		192,116		27,362		145,157		599,062
Total Sales	$	7,921,533	$	2,163,693	$	1,524,148	$	168,005	$	11,777,379

(1)Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment, and other janitorial products, medical supplies and smallwares.

	13-Week Period Ended Sep. 28, 2019
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	2,075,300	$	412,155	$	381,377	$	—	$	2,868,832
Canned and dry products	1,898,889		586,625		37,190		—		2,522,704
Frozen fruits, vegetables, bakery and other	1,449,218		552,014		254,455		—		2,255,687
Dairy products	1,148,381		312,178		145,921		—		1,606,480
Poultry	1,090,106		218,600		204,269		—		1,512,975
Fresh produce	998,164		257,758		60,933		—		1,316,855
Paper and disposables	719,540		98,342		168,436		17,373		1,003,691
Seafood	685,410		149,590		24,855		—		859,855
Beverage products	290,785		132,852		143,679		24,329		591,645
Other (1)	302,840		192,274		25,879		243,288		764,281
Total Sales	$	10,658,633	$	2,912,388	$	1,446,994	$	284,990	$	15,303,005

(1)Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment and other janitorial products, medical supplies and smallwares.

Credit Risk

Sysco is potentially subject to group concentrations of credit risk with respect to accounts receivable, as large amounts of the company’s trade receivables are concentrated on customers within the food away from home industry across North America and Europe. The prolonged disruption of Sysco’s customers’ businesses due to the COVID-19 pandemic has created additional bad debt risk for the company.

Sysco determines the past due status of trade receivables based on contractual terms with each customer, evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts or the uncollectible receivables to be written off. Many of Sysco’s customers, including those in the restaurant, hospitality and education segments, are operating at a substantially reduced volume due to governmental requirements for closures or other social-distancing measures and a portion of Sysco’s customers are closed. Some of these customers have ceased paying their outstanding receivables, creating uncertainty as to their collectability. To calculate the ending reserve needed, the company estimated uncollectible amounts based on the current collection experience and by applying write-off percentages based on historical loss experience, including loss experience during times of local and regional disasters. The COVID-19 pandemic is more widespread and longer in duration than historical disasters impacting our business, and it is possible that actual uncollectible amounts will differ.

In the first quarter of fiscal 2021, Sysco recognized a net $77.8 million benefit on its provision for losses on receivables. In the third and fourth quarters of fiscal 2020, the company experienced an increase in past due receivables and recognized additional bad debt charges on its trade receivables that were outstanding at the time the pandemic caused closures among our customers in mid-March 2020. These receivables were all created in fiscal 2020 and are referred to as pre-pandemic receivables. In the first quarter of fiscal 2021, collections of the company’s pre-pandemic receivables have improved, and its reserve for doubtful accounts has been reduced accordingly, resulting in a $98.6 million benefit. Additional reserves of $20.8 million were recorded in the first quarter of fiscal 2021 for receivables relating to periods beginning after the onset of the COVID-19 pandemic.